WASHINGTON - The Environmental Protection Agency on Wednesday unveiled the next phase of its program to entice bankers into redeveloping polluted urban areas.

Incentives held out by the government include points under the Community Reinvestment Act and protection from lender liability suits.

At a press conference, EPA Administrator Carol M. Browner announced that 15 cities, including St. Louis, Detroit, New Orleans, and Baltimore, each will receive $200,000 to pay for cleanups.

Small businesses that want to redevelop a contaminated site will benefit most from the program, according to Denise Chamberlain, associate general counsel at Mellon Bank Corp.

Now, most banks won't extend credit to such businesses because they lack the capital to clean the site and start their operation. EPA is stepping in to solve the first problem by providing new clean-up money, she said.

"That gives banks a larger pool of customers to work with," Ms. Chamberlain said.

The money is intended to jump-start the "Brownfields Initiative," announced by the EPA in January and so named to contrast blighted urban sites with pristine green fields in suburban areas.

Each of the 15 cities will work with local lenders and developers to clean up sites and then attract new companies, said Elliott P. Laws, EPA's assistant administrator for solid waste emergency management.

"Bankers have been among our closest allies," Mr. Laws said. "They have been instrumental. ... We look forward to working closely with the lending industry."

Regulators have agreed to give banks participating in the EPA program credit under CRA. EPA also has promised not to sue banks for any environmental problems at the selected sites. The EPA will spell out this protection in formal rules later this summer.

Banking industry officials were quick to praise the program.

"This is an opportunity to get out of limbo and get those properties back to use," said Richard Morrison, senior vice president at Bank of America.

"This is welcome news and something we have been eagerly awaiting," said John J. Byrne, senior federal counsel at the American Bankers Association.

"We are very enthusiastic," said Alfred Pollard, senior counsel at the Bankers Roundtable. "They are putting forth the best effort they can to facilitate these cleanups and provide as much assurance about lender liability as they can."

Fear of being stuck with a costly clean-up bill has prevented many bankers from financing projects involving contaminated sites.

While the initiative resolves concerns about government suits, it does not affect private litigation, causing some bankers to say the industry won't embrace environmental cleanups until Congress provides banks with a liability safe harbor.

"We need to have all the pieces of the puzzle brought together before it can be solved," Ms. Chamberlain at Mellon said.

That could occur later this year. Lender liability protections are part of the regulatory relief measure now pending in the House. Also, separate environmental committees in the Senate and House are drafting similar legislation, which enjoys bipartisan support.

Other cities to receive Brownfields Initiative grants are: Laredo, Tex.; Louisville, Ky.; Sacramento, Calif.; Trenton, N.J.; Cape Charles, Va.; Knoxville, Tenn.; and Birmingham, Ala.; Rochester, N.Y.; and Indianapolis.

Also covered by the EPA program are 36 municipalities in suburban Chicago, and a coalition of seven Oregon cities.

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